U.S. Export Rules To Become More Flexible

 - November 11, 2011, 12:01 AM
Northrop Grumman CEO Wes Bush believes that current U.S. export export restrictions are hurting the aerospace industry in the global marketplace.

New draft rules for the export of U.S. military aircraft and parts were released this week. They are part of a systemic reform of the export control regime for military-related products that has been long sought by America’s aerospace industry.

“Today’s export restrictions are hurting this industry and the U.S. without making us any safer, and they could cause the U.S. to relinquish to other nations its lead in these technologies,” said Northrop Grumman CEO Wes Bush in August. “Today, the U.S. is struggling to sell unmanned aircraft to our allies, while other nations prepare to jump into the marketplace with both feet,” he added.

The current regime involves two different lists of products subject to licensing–the Commerce Control List administered by the Department of Commerce and the U.S. Munitions List maintained by the State Department. Commerce’s Bureau of Industry and Security regulates the export of commercial products, including “dual use” items with both commercial and military applications.

Shipment of military goods is subject to licensing by State Department’s Directorate of Defense Trade Controls.

The reform will create a unified list of controlled products and a single licensing agency for both dual-use and munitions exports. Former Defense Secretary Robert Gates said last year that the reform should ensure that “higher walls are placed around fewer, more critical items.”

The Aerospace Industries Association (AIA), which represents U.S. aerospace and defense companies, applauded the reform, saying that technologies deemed to have little or no military value should be removed from the U.S. Munitions List. Exports of these technologies to military allies may be eligible for more flexible Commerce license exemptions, and items not “specially designed” for the military will be subject to the same export-control requirements as their commercial equivalents, AIA said.